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After months of negotiations, Manoj Gaur's Jaiprakash Associates is set to announce the sale of its Gujarat cement units to Kumar Mangalam Birla's Ultratech Cement in Mumbai on Wednesday evening. The valuation is far lower than what it sought when it started the talks early this year. Both Jaypee and Ultratech will make the announcement simultaneously in Delhi and Mumbai respectively by the chairmen of respective companies.
According to insiders, the cement units are to be sold at a valuation of $130 a tonne, compared to $160 a tonne it was seeking earlier. Jaiprakash, which is sitting on a mountain of debt, was expected to get around Rs 4,500 crore from the sale of its cement units, but now it will get a tad below Rs 4,000 crore, said a banker. The only consolation for Jaypee is that since early this year, the Indian currency has lost close to 20% of its value against the dollar which will add to its kitty.
The Gujarat units have a capacity of 4.8 million tonnes annually (mtpa) and will help Ultratech increase its presence in western India.
Jaiprakash was trading at Rs 42.80, up 5% while Ultratech was trading at Rs 1720, up 0.92% a share on Wednesday afternoon.
